Hospital chargemaster management: 4 tips for improvement

The chargemaster plays a critical role in ensuring proper reimbursement for the care hospitals provide.

Chargemasters list the organization's rates for procedures, prescription drugs and supplies, including implants, and are part of the process for billing payers and patients.

That's why it's important that chargemasters feature accurate billable charges.

Like many organizations, Van Nuys, Calif.-based Valley Presbyterian Hospital faced challenges in this area.

Supply and demand issues are sometimes created at drug manufacturer plants, such as those caused by hurricane activity in the Caribbean, which shut down pharmaceutical plant operations according to Rita Sullivan, the organization's revenue integrity manager.

Demand caused the price of medications produced in those plants to change significantly within a short period of time, and her facility struggled to keep up with that in the pharmacy section of the chargemaster.

Valley Presbyterian's challenges also involved working with pharmacies to provide correct information to the state's Medicaid program about drugs purchased at discounted rates under the federal 340B program.

"There's layer upon layer of challenges in keeping your pharmacy chargemaster viable so it reflects your costs on a given day, and [shows] that you've marked it with the correct modifiers," said Ms. Sullivan. "You have to work in tandem with pharmacies, [and] some of them aren't as savvy and don't see it as a priority to work with you. It's a delicate balance to keep up with changing costs without software to assist, as the pharmacy management staff are not always focused in this regard."

She said that another challenge is keeping up with the continual addition of new supplies and implants used in surgical areas.

To address these challenges, Valley Presbyterian switched to a chargemaster solution from Vitalware, a Yakima, Wash.-based provider of revenue cycle solutions.

The new solution enabled the hospital to upload a charge file as well as set up a script to send changes to its accounting platform.

Since adopting the solution, Valley Presbyterian Hospital has improved efficiency in terms of updating charges, finding and correcting chargemaster errors, and identifying necessary changes as new codes are created by the American Medical Association and Medicare, said Ms. Sullivan.

She said the hospital is also able to quickly assess how its prices compare to other facilities in the area.

Based on her experiences, Ms. Sullivan recommended that organizations:

- Track and trend issues identified by the billing staff.

- Try to minimize the number and use of miscellaneous implant charges.

- Keep up with coding changes, which occur annually. Ms. Sullivan explained: "Identify new codes to add, old codes to delete, and periodic review of charge amounts compared to the market."

- Ensure that the ability to add, change or delete charges in the chargemaster file is limited to an approved few, and that an approval process exists to monitor changes.


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